Pace Development to raise funds for new projects

Somluck Srimalee

The NationMarch 17, 2014 1:00 am

Pace Development Corporation Plc plans to raise funds through the issuance of a debenture and property fund worth Bt4.5 billion over the next two years as it looks to develop luxury residential projects in Hua Hin and Bangkok.

The company's chief executive officer Sorapoj Techakraisri said that the company would issue a property fund, or real estate investment trust, worth Bt1.5 billion by selling its retail business, MahaNakhon CUBE.

He said MahaNakhon CUBE was already completed and would open in the second half of the year, with its occupancy rate at 95 per cent and its total retail space 5,200sq m.

The company will issue debentures worth Bt1.5 billion in the second quarter, with the next Bt1.5 billion worth of debentures issued in 2015.

"We plan to raise funds to develop our two new residential projects, which will be launched in the second half of this year," Sorapoj said.

Sorapoj said the projects would generate income for the company in 2015 and 2016. The company has set aside an investment budget of between Bt2 billion and Bt3 billion to buy undeveloped land to develop luxury residential projects in 2015 and 2016.

Sorapoj said that on average the company planned to launch one or two luxury residential projects worth about Bt10 billion in total each year.

They would generate income for the company in the long term after its mix-used Bt 19-billion project MahaNakhon was completed in 2015.

MahaNakhon is being constructed in combination with MahaNakhon CUBE and will boast luxury condominiums at its Ritz-Carton Residences. It will also feature a luxury hotel, Bangkok Edition.

The transfer to customers is slated for the end of 2015.

The Ritz-Carton Residences recorded presales worth Bt7 billion as of the end of February, or about 60 per cent of the total value.

Pace is targeting 70 per cent presales by end of the year. The company is headed for a net loss this year after targeting total revenue of Bt200 million.

Last year it had total revenue of Bt345 million for a net loss of Bt795.37 million, with its debt-to-equity ratio 0.8:1. However, Sorapoj said that the company would record net profit in 2015, when Ritz-Carton Residences was due to be completed.

Sorapoj said that demand for luxury units was showing strong growth despite the economy slowing due to the political uncertainty, with demand particularly buoyant among foreign buyers who were expanding their investments in the region in anticipation for the Asean Economic Community coming into effect in 2015.